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Great Graphic: Japan's PMI and Equities

July 31, 2013
This Great Graphic was posted by Cullen Roche of Pragmatic Capitalism.  The July PMI was disappointing and follows poor industrial production figures at the start of the week.   This coupled with a decline in Prime Minister's Abe's poll numbers is spurring talk that the best of Abenomics can now be seen in the rear view mirror. 
Some obse…
Great Graphic: Japan's PMI and Equities Great Graphic: Japan's PMI and Equities Reviewed by Marc Chandler on July 31, 2013 Rating: 5
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Fed Statement Mostly Similar, No Talk of Tapering

July 31, 2013
With many observers expecting the Fed to taper in September, disappointment that there was nothing in the statement to support such ideas has seen the dollar fall and the stocks and bonds traded higher.
The main change in the statement appears to be greater recognition of the risk of deflation. This essentially co-opted Bullard, who did not dis…
Fed Statement Mostly Similar, No Talk of Tapering Fed Statement Mostly Similar, No Talk of Tapering Reviewed by Marc Chandler on July 31, 2013 Rating: 5
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Great Graphic: Federal Reserve Members and Their Forecasts

July 31, 2013
This Great Graphic was in the Wall Street Journal's web site. It was really meant to be interactive, so click here to access this feature and more information.    
The Wall Street Journal reporters offer a way to evaluate the accuracy of forecasts by members of the Federal Reserve.  It is based on speeches and Congressional testimony between…
Great Graphic: Federal Reserve Members and Their Forecasts Great Graphic: Federal Reserve Members and Their Forecasts Reviewed by Marc Chandler on July 31, 2013 Rating: 5
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Focus Shifts to the US

July 31, 2013
The US dollar is narrowly mixed in choppy month end turn-over ahead of a slew of US data and the conclusion of the FOMC meeting. Global equities are mixed, with Asia dragged lower by the 1.5% decline in the Nikkei, while Europe is faring better with the Dow Jones Stoxx 600 posting fractional gains near midday in London. Bond markets are mostly …
Focus Shifts to the US Focus Shifts to the US Reviewed by Marc Chandler on July 31, 2013 Rating: 5
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Great Graphic: What Does Middle Class Mean?

July 30, 2013
This Great Graphic comes from Euromonitor International.  It shows the results of international surveys to see what goods and behaviors are associated with the middle class.  It appears that one's home is the anchor to middle class status.  The survey was conducted online, which, itself says something about the middle class.  Some 6600 people…
Great Graphic: What Does Middle Class Mean? Great Graphic: What Does Middle Class Mean? Reviewed by Marc Chandler on July 30, 2013 Rating: 5
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Spain and Italy Update

July 30, 2013
July has been kind to Spain and Italy. The respective equity markets have risen about 8.5% and 7.5%. The benchmark 10-year yields have fallen 10 and 15 bp, while the 2-year yields have tumbled 30 and 32 bp respectively.  
The economic data suggests both countries are slowly recovering.   Nevertheless, is cause for concern and, whether it is the…
Spain and Italy Update Spain and Italy Update Reviewed by Marc Chandler on July 30, 2013 Rating: 5
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US Dollar Marking Time, Aussie Steals Spotlight

July 30, 2013
The US dollar is little changed against most of the major currencies as summer market awaits the week's key events that begin in earnest tomorrow. The Australian dollar is the biggest mover, dropping about 1.5% against the greenback in response to two blows: a collapse in building approvals (-6.9% vs a consensus forecast of a +2.3%)and dovi…
US Dollar Marking Time, Aussie Steals Spotlight US Dollar Marking Time, Aussie Steals Spotlight Reviewed by Marc Chandler on July 30, 2013 Rating: 5
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Measuring Intangibles

July 29, 2013
The first estimate of US Q2 GDP will released a few hours before the FOMC meeting concludes on Wednesday. Estimates have generally been reduced as data suggest consumers have pulled back and the expected inventory rebuilding did not materialize. Some forward looking indicators point to a better Q3, but with some evidence that activity in the in…
Measuring Intangibles Measuring Intangibles Reviewed by Marc Chandler on July 29, 2013 Rating: 5
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Emerging Markets: Preview for the Week Ahead

July 29, 2013
(from my colleagues Dr. Win Thin and Ilan Solot)

Israel central bank meets today and is expected to keep policy unchanged. A dovish bias is likely to remain in place, and the resumption of easing becomes more likely if the shekel remains firm. Indeed, we expect further FX intervention if the 3.55 is tested again.
The Reserve Bank of India meets T…
Emerging Markets: Preview for the Week Ahead Emerging Markets: Preview for the Week Ahead Reviewed by Marc Chandler on July 29, 2013 Rating: 5
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Great Graphic: New High in Margin Debt

July 29, 2013
The US equity market has fully recovered from the mid-May through late June swoon.  It has been aided by new margin borrowing.  We have not looked at margin use at the NYSE for a couple of months and it is continuing to trend higher as this Great Graphic from Pragmatic Capitalism illustrates.

Margin usage is now above the 1999 and 2007 peaks and …
Great Graphic: New High in Margin Debt Great Graphic: New High in Margin Debt Reviewed by Marc Chandler on July 29, 2013 Rating: 5
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Dollar Begins Big Week Little Changed, Yen at One Month Highs

July 29, 2013
In what may prove to be the calm before the storm, the US dollar has been confined to fairly narrow trading ranges against most of the major foreign currencies, mostly within Friday's ranges.  
The Japanese yen is the main exception. It is posting across the board gains. The dollar is trading below JPY98 for the first time since late June. …
Dollar Begins Big Week Little Changed, Yen at One Month Highs Dollar Begins Big Week Little Changed, Yen at One Month Highs Reviewed by Marc Chandler on July 29, 2013 Rating: 5
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Fundamental Keys in the Week Ahead

July 28, 2013
Many in the US and Europe are enjoying summer holidays. However, the week ahead is chock full of fundamental events, and is, arguably, the most important week for the next month. Indeed, the events this week will help shape expectations for the period ahead. The US dollar has been trading with a heavier bias against the major currencies, and t…
Fundamental Keys in the Week Ahead Fundamental Keys in the Week Ahead Reviewed by Marc Chandler on July 28, 2013 Rating: 5
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Great Graphic: US, UK, EMU GDP Relative to Pre-Crisis Peak

July 28, 2013
This Great Graphic was posted by Sober Look.  It was in Barclay's research and users Haver Analytics data.  It depicts the real GDP level of the US, UK and euro area.   
It shows that the downturn was not as deep in the US as the other two centers.  The economies generally bottomed in sync, but the US recovery has been so much more pronounced…
Great Graphic: US, UK, EMU GDP Relative to Pre-Crisis Peak Great Graphic: US, UK, EMU GDP Relative to Pre-Crisis Peak Reviewed by Marc Chandler on July 28, 2013 Rating: 5
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Cool Video: Three Experiments that Shape Our Understanding of the World Cool Video: Three Experiments that Shape Our Understanding of the World Reviewed by Marc Chandler on July 27, 2013 Rating: 5
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Currency Positioning and Technical Outlook: A Week of Fundamentals

July 27, 2013
Fundamental considerations are likely to dominate technical factors in the week ahead. The Federal Reserve, Bank of England and the European Central Bank meet. The PMIs are released. The first estimate of Q2 US GDP, July auto sales and the monthly employment will also be reported. Not to put too fine of a point on it, and recognizing the likel…
Currency Positioning and Technical Outlook: A Week of Fundamentals Currency Positioning and Technical Outlook: A Week of Fundamentals Reviewed by Marc Chandler on July 27, 2013 Rating: 5
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Great Graphic: Manufacturing PMI in US, EMU and China

July 26, 2013
Recent data suggests some moderation in the world's two biggest economies, the US and China, and some improvement in the weak sister of the major economies, the euro area. This Great Graphic that was posted on Business Insider captures this.  
At the same time, it is important to recognize that cross-country comparisons are misleading.  For ex…
Great Graphic: Manufacturing PMI in US, EMU and China Great Graphic: Manufacturing PMI in US, EMU and China Reviewed by Marc Chandler on July 26, 2013 Rating: 5
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Japanese Inflation and Fed Speculation Dominates ahead of Weekend

July 26, 2013
The US dollar is trading near its worst levels for the week in mostly quiet turnover. The yen is displaying independent strength and has now eclipsed the New Zealand dollar as the strongest of the major currencies this week with a 2.1% gain against the dollar. Sterling, which had been lifted to a month high yesterday on the back of the construc…
Japanese Inflation and Fed Speculation Dominates ahead of Weekend Japanese Inflation and Fed Speculation Dominates ahead of Weekend Reviewed by Marc Chandler on July 26, 2013 Rating: 5
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Emerging Markets: What has Changed

July 25, 2013
(from my colleague Ilan Solot)
1) Easing in Hungary will be deeper than previously expected
2)  India steps up interventions even more 
3) Expectations for a Chinese “mini-stimulus” are growing, but markets are not responding
1) Easing in Hungary will be deeper than previously expected. In this week’s meeting, the Hungarian central bank delivered the …
Emerging Markets: What has Changed Emerging Markets: What has Changed Reviewed by Marc Chandler on July 25, 2013 Rating: 5
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Cool Video: Evolution and Misconceptions

July 25, 2013
This Cool Video comes from Ted-Ed talks.  In about 4.5 minutes, the video offers an entertaining discussion of common misconceptions and misunderstandings about evolution. Tip of the Hat to Maria Popova's Exp.Lore blog.


Cool Video: Evolution and Misconceptions Cool Video: Evolution and Misconceptions Reviewed by Marc Chandler on July 25, 2013 Rating: 5
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Don't Be Confused: Durable Orders Confirming Soft Q2 US GDP

July 25, 2013
The headline increase in the June durable goods order report is misleading for those thinking about next week's Q2 GDP report. The consensus had expected a 1.4% increase and instead jumped 4.2%, while the May series was revised higher to 5.2% from 3.6%.  Those data surprise models that are popular on Wall Street would take note.  
However, f…
Don't Be Confused: Durable Orders Confirming Soft Q2 US GDP Don't Be Confused: Durable Orders Confirming Soft Q2 US GDP Reviewed by Marc Chandler on July 25, 2013 Rating: 5
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More News, but Broad FX Consolidation Continues

July 25, 2013
The US dollar enjoys a mostly firmer bias today, though the Japanese yen and New Zealand dollar are exceptions for different reason. Yet the general consolidative phase is continuing, despite a fair amount of news. While global equities are weaker and there is talk of risk-off, bonds are also lower. 
The dollar's firmer tone coincides with …
More News, but Broad FX Consolidation Continues More News, but Broad FX Consolidation Continues Reviewed by Marc Chandler on July 25, 2013 Rating: 5
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Much Data, Little Price Movement in FX

July 24, 2013
The US dollar is narrowly mixed against most of the major and emerging market currencies as the North American session begins. The MSCI Asia Pacific Index was off fractionally, while European bourses are higher, with the Dow Jones Stoxx 600 up a little more than 0.5%. Benchmark bond yields are also generally firmer.
There has been a slew of d…
Much Data, Little Price Movement in FX Much Data, Little Price Movement in FX Reviewed by Marc Chandler on July 24, 2013 Rating: 5
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Deep Dive: Surplus Capital Revisited

July 23, 2013
Copernicus never really proved the earth went around the sun. Rather he argued, that if one were to assume it did, other phenomenon would be understandable. This essay proposes to employ the Copernican strategy to understand the political economy. This thought experiment requires holding in abeyance the usual narrative one hears from commentato…
Deep Dive: Surplus Capital Revisited Deep Dive: Surplus Capital Revisited Reviewed by Marc Chandler on July 23, 2013 Rating: 5
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Two Developments to Note

July 23, 2013
The capital markets are trading mostly quietly amid a dearth of fresh incentives and summer holidays draining participation and interest. The US dollar is beginning the North American session on a firmer note, but largely within yesterday's ranges. The US 10-year Treasury yield is back of the 2.50% threshold and European bond yields are a f…
Two Developments to Note Two Developments to Note Reviewed by Marc Chandler on July 23, 2013 Rating: 5
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Great Graphic: European Unemployment and Science and Technology

July 23, 2013
Unemployment in Europe is near record highs. There seems to a be both cyclical and structural components. The the regional economy contracting for six consecutive quarters, the demand for labor is understandably poor.
However, this Great Graphic, from Simone Foxman at Quartz, considerably complicates the picture.   Unemployment levels for colle…
Great Graphic: European Unemployment and Science and Technology Great Graphic: European Unemployment and Science and Technology Reviewed by Marc Chandler on July 23, 2013 Rating: 5
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EM Preview for the Week Ahead

July 22, 2013
(from my colleagues Dr. Win Thin and Ilan Solot)

The most contentious event this week will be the Turkish central bank meeting - observers still differ on the magnitude of the increase in the overnight lending rate. Hungary should cut rates by 25 bp, while the Philippines and Colombian central banks are expected to keep rates unchanged. On the dat…
EM Preview for the Week Ahead EM Preview for the Week Ahead Reviewed by Marc Chandler on July 22, 2013 Rating: 5
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Dollar Softens to Start Week

July 22, 2013
The US dollar has softened to start the week amid a light news stream. The price action seems to be a continuation of what was seen last week.  Expect a consolidative tone for the remainder of the North American session.  
Recall that the major currencies tended to consolidate within broad ranges established July 10-11 in response to Bernanke…
Dollar Softens to Start Week Dollar Softens to Start Week Reviewed by Marc Chandler on July 22, 2013 Rating: 5
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Half a Dozen Thoughts about the Week Ahead

July 21, 2013
We have argued that there were three main drivers of the capital markets: inspired by talk of Fed tapering, long-term interest rates had bottomed and the unwinding of structural positions based on low and falling interest rates; the sales of foreign assets by Japanese investors; and the liquidity squeeze of China and the slowing of the world'…
Half a Dozen Thoughts about the Week Ahead Half a Dozen Thoughts about the Week Ahead Reviewed by Marc Chandler on July 21, 2013 Rating: 5
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Great Graphic: Equity Flows DM >EM

July 21, 2013
This Great Graphic was posted on Business Insider, which got it from Bank of America, which relied on data from EPFR Global. It shows the cumulative capital flows into developed and emerging market equities funds since 2002.
The flow story, as one would expect, jives with the performance story we previously highlighted.  That must be one of the…
Great Graphic: Equity Flows DM >EM Great Graphic: Equity Flows DM >EM Reviewed by Marc Chandler on July 21, 2013 Rating: 5
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Great Graphic: Global Perceptions of the US and China by Pew Research

July 20, 2013
This Great Graphic is really a slide show presentation of the results of Pew Research Center's international survey of perceptions and attitudes about the US and China.  The results are fascinating and it is especially noteworthy to see the changes over time.  It is probably a mistake to place great importance on any one result, but direction…
Great Graphic: Global Perceptions of the US and China by Pew Research Great Graphic: Global Perceptions of the US and China by Pew Research Reviewed by Marc Chandler on July 20, 2013 Rating: 5
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Currency Positioning and Technical Outlook: Risk of Softer Dollar in Consolidative Phase Currency Positioning and Technical Outlook: Risk of Softer Dollar in Consolidative Phase Reviewed by Marc Chandler on July 20, 2013 Rating: 5
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